Asian Development Bank approves $300 million loan for Pakistan's macroeconomic stability

 MANILA, PHILIPPINES: On Friday, the Asian Development Bank (ADB) gave the green light for a policy-based loan of $ 300 million to Pakistan so that the country can work towards its macroeconomic stability by diversifying exports and improving commercial competitiveness.

In an official statement, the bank said that while the country is at a crucial juncture in terms of its macroeconomic recovery due to COVID-19, the government's efforts have started to show promising results for the current year.

"The ADB program will support these efforts and help Pakistan improve its export competitiveness, now more important than ever given the impacts of the pandemic," said ADB Senior Public Management Specialist Hiranya Mukhopadhyay.

Through the ADB program, Pakistan will sustainably recover its current account deficit while continuing to facilitate export diversification, the statement read, adding that the bank will help the country improve its international competitiveness by introducing reforms. tariff and tax policy.

"[The program will also] further strengthen the country's key institutions, including accreditation bodies, the Export-Import Bank of Pakistan and the Pakistan One-Stop-Shop."

Trade and competitiveness

According to the statement, the new ADB financing for Pakistan is part of Subprogram 2 of the Trade and Competitiveness Program. He said that in the first phase of the program, the bank helped the Pakistani government introduce key reforms.

For example, tariffs and tariffs on a large number of raw materials and intermediate goods were lowered or abolished, while various measures were taken to strengthen key institutions.

"Since fiscal 2004, Pakistan has seen a rise and fall pattern of export growth reflecting poor performance in its export industry and a long-term decline in export competitiveness. This is compounded by the loss of export growth momentum due to COVID-19, which has reduced demand for manufactured goods from high-income countries and disrupted the supply of raw materials, "the statement added.

The bank said it is coordinating its efforts with other development partners and donors, while the program complements reform initiatives led by the International Monetary Fund by helping to improve competitiveness, which will help build strong foreign exchange reserves.